Apple announced its largest share buyback programme, worth $110 billion, on Thursday after reporting an annual drop in its March quarter net profit and revenues.
Apple’s chief financial officer Luca Maestri said the board has authorised the share repurchases “given our confidence in Apple’s future and the value we see in our stock”.
The Cupertino-based company reported a 2.2 per cent annual drop in the 2024 fiscal second-quarter net profit to more than $23.6 billion. Its earnings per share stood at $1.53.
Revenue during the January-March period dropped more than 4 per cent to $90.8 billion, slightly exceeding analysts’ estimates of $90 billion.
But chief executive Tim Cook said he expects a sales growth in the current quarter as the company increases its investment on artificial intelligence-driven features that will be announced in coming months.
“More than ever in the past decade, the company needs new products and solutions that will shift its behemoth operating costs back into the sustained growth path,” Thomas Monteiro, senior analyst at Investing.com, told The National.
"Against this backdrop, Apple will need massive mid-term investor support and trust, which is why it announced its largest-ever round of buybacks.”
After the earnings announcement, Apple stock surged 11.6 per cent to trade at $184.64 a share in after-hours trading on Thursday.
It closed 2.20 per cent up at $173.03, giving the company a market value of $2.67 trillion.
Its stock has dropped almost 7 per cent since the start of the year.
Falling iPhone sales
iPhone sales accounted for more than half of the company's total revenue in the last quarter.
They dropped 10.4 per cent to nearly $45.9 billion in the quarter from the year before period, missing analysts’ estimates of $46 billion.
Analysts said the decline in sales indicates a lacklustre demand for the latest generation of iPhone 15 series, which was launched in September.
In its defence, Mr Cook said last quarter’s iPhone sales faced tough comparison with the previous year period, during which the company recorded $5 billion in deferred iPhone 14 sales stemming from supply issues caused by the Covid-19 pandemic.
The company’s total revenue from its services division grew about 14 per cent annually to almost $23.9 billion, while revenue from wearables, home and accessories products dropped 9.6 per cent annually to more than $7.9 billion.
It was an all-time revenue record in the company’s services division.
Revenue from iPads and computers dropped almost 6 per cent to more than $13 billion.
“Thanks to very high levels of customer satisfaction and loyalty, our active installed base of devices has reached a new all-time high across all products and all geographic segments,” said Mr Maestri, without disclosing the exact number.
Why Tim Cook is optimistic about China
Apple’s sales in the Americas region accounted for more than 41 per cent of the company's total second-quarter revenue, with more than $37.2 billion.
It was followed by Europe and the Greater China market (China, Hong Kong and Taiwan), which added $24.1 billion and $16.3 billion, respectively, to the company’s revenue.
In Europe, sales remained flat while they dropped 8 per cent in the Greater China market.
Apple is facing stiff competition in China from local brands such as Huawei, Xiaomi and Oppo. But Mr Cook is optimistic about the Chinese market’s future potential.
“I feel good about China. I think more about long term than to the next week or so,” Mr Cook told CNBC.
Japan and the rest of the Asia Pacific market added more than $12.9 billion to Apple’s second-quarter sales, an annual drop of 15 per cent.
Apple said its board of directors had declared a cash dividend, payable on May 16, of $0.25 for each share of the company’s common stock.
Its cash and cash equivalents surged 9.1 per cent annually to more than $32.6 billion as of March 30.
Why Apple needs more futuristic products like Vision Pro
In February, Apple also entered the augmented reality headset market with the launch of the Vision Pro.
With a hefty price of almost $3,500, the product has had a slow start and may take few years before it significantly contributes to Apple's revenue, analysts said.
"However, the sustained downtrend in iPhone sales and pressured margins show that the revenue growth plateau is more than a regional problem and should keep on deepening without new, more innovative products," Mr Monteiro said.
Apple is expected to announce a range of new products at an event next week, and at its Worldwide Developers Conference in June.
Zayed Sustainability Prize
England squad
Moeen Ali, James Anderson, Jofra Archer, Jonny Bairstow, Dominic Bess, James Bracey, Stuart Broad, Rory Burns, Jos Buttler, Zak Crawley, Sam Curran, Joe Denly, Ben Foakes, Lewis Gregory, Keaton Jennings, Dan Lawrence, Jack Leach, Saqib Mahmood, Craig Overton, Jamie Overton, Matthew Parkinson, Ollie Pope, Ollie Robinson, Joe Root, Dom Sibley, Ben Stokes, Olly Stone, Amar Virdi, Chris Woakes, Mark Wood
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Generational responses to the pandemic
Devesh Mamtani from Century Financial believes the cash-hoarding tendency of each generation is influenced by what stage of the employment cycle they are in. He offers the following insights:
Baby boomers (those born before 1964): Owing to market uncertainty and the need to survive amid competition, many in this generation are looking for options to hoard more cash and increase their overall savings/investments towards risk-free assets.
Generation X (born between 1965 and 1980): Gen X is currently in its prime working years. With their personal and family finances taking a hit, Generation X is looking at multiple options, including taking out short-term loan facilities with competitive interest rates instead of dipping into their savings account.
Millennials (born between 1981 and 1996): This market situation is giving them a valuable lesson about investing early. Many millennials who had previously not saved or invested are looking to start doing so now.
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
RESULTS
Bantamweight title:
Vinicius de Oliveira (BRA) bt Xavier Alaoui (MAR)
(KO round 2)
Catchweight 68kg:
Sean Soriano (USA) bt Noad Lahat (ISR)
(TKO round 1)
Middleweight:
Denis Tiuliulin (RUS) bt Juscelino Ferreira (BRA)
(TKO round 1)
Lightweight:
Anas Siraj Mounir (MAR) bt Joachim Tollefsen (DEN)
(Unanimous decision)
Catchweight 68kg:
Austin Arnett (USA) bt Daniel Vega (MEX)
(TKO round 3)
Lightweight:
Carrington Banks (USA) bt Marcio Andrade (BRA)
(Unanimous decision)
Catchweight 58kg:
Corinne Laframboise (CAN) bt Malin Hermansson (SWE)
(Submission round 2)
Bantamweight:
Jalal Al Daaja (CAN) bt Juares Dea (CMR)
(Split decision)
Middleweight:
Mohamad Osseili (LEB) bt Ivan Slynko (UKR)
(TKO round 1)
Featherweight:
Tarun Grigoryan (ARM) bt Islam Makhamadjanov (UZB)
(Unanimous decision)
Catchweight 54kg:
Mariagiovanna Vai (ITA) bt Daniella Shutov (ISR)
(Submission round 1)
Middleweight:
Joan Arastey (ESP) bt Omran Chaaban (LEB)
(Unanimous decision)
Welterweight:
Bruno Carvalho (POR) bt Souhil Tahiri (ALG)
(TKO)
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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